End 'three-ring circus' urges Obama

Tuesday 26 July 2011 02:21 BST

Barack Obama addresses the US from the White House in Washington (AP)

President Barack Obama has described the fight over raising the limit on government borrowing and avoiding default on US debt as a "partisan three-ring circus" and blamed the crisis on the refusal of many Republican politicians to compromise.

In a hastily arranged nationally televised speech, he said the US was dangerously close to default, and warned of a "reckless and irresponsible" outcome without a compromise solution by the August 2 deadline.

He urged Americans to make their voices heard and let their representatives know they support "a balanced approach to reducing the deficit".

Speaker John Boehner, who leads the Republican-dominated House of Representatives, offered a nationally televised rebuttal minutes after Mr Obama's speech, accusing the president of seeking "a blank cheque today" and declaring: "This is just not going to happen."

Mr Obama and Mr Boehner spoke as the political stalemate over raising the debt limit deepened despite the introduction of new plans by both Mr Boehner's House Republicans and the Democratic-controlled Senate under the leadership of Harry Reid.

Decrying a "partisan three-ring circus" in the nation's capital, Mr Obama assailed the new Republican plan to raise the nation's debt limit as an invitation to another crisis in six months' time. He said congressional leaders must produce a compromise that can reach his desk before the deadline.

Without signed legislation by close of business on August 2, the Treasury will be unable to pay all its bills, possibly triggering an unprecedented default which officials warn could badly harm a national economy still struggling to recover from the worst recession in decades.

Despite warnings to the contrary, US financial markets have appeared to take the political manoeuvring in their stride - so far. Wall Street posted losses on Monday but with no indication of panic among investors.

Republicans insist on deep cuts in spending in return for their votes to raise the borrowing limit. The Republicans, under the powerful sway of the small-government, low-tax tea party movement, have consistently refused Mr Obama's request for a balanced approach to deficit reduction that includes both spending cuts and tax increases.

"The only reason this balanced approach isn't on its way to becoming law right now is because a significant number of Republicans in Congress are insisting on a cuts-only approach - an approach that doesn't ask the wealthiest Americans or biggest corporations to contribute anything at all," the president said.